NACHA Unveils Real Time ACH Settlement Plan

The Electronic Payments Association said it has a plan to move the industry into real time ACH transaction settlement.

The organization announced Tuesday it adopted a phased approach to make the shift. Currently, the system functions on a single, next-day settlement and NACHA said the process will enable multiple, same-day settlement options.

“NACHA has conducted extensive work over the past year to outline the parameters and requirements of a ubiquitous, same-day capability for the ACH Network that enables financial institutions, large and small, to provide value to their end-users,” said Janet O. Estep, CEO of NACHA. “A phased implementation enables us to introduce new capabilities more quickly, and then continue to build over time, creating value for all participants at each step along the way.”

Under the plan's outline, the first implementation phase would provide a foundation to better enable same-day ACH credits to support important use cases such as payroll, person-to-person payments and expedited bill payments.

The second phase would introduce same-day ACH debits and enable a wide variety of consumer bill payment for things like utility, mortgage, loan and credit card payments.

A third phase would improve the service level across the ACH Network and reduce counter-party risk by adding a second same-day settlement and accelerating funds availability.

“The concept of phased implementation is the result of thoughtful exploration of feedback we received over the past year,” Estep said. “This is the next step to help create a rule proposal for the industry to enable same-day ACH through the NACHA rulemaking process.”

The association also said it is launching a study to assess the industry’s costs and potential transaction volume for same-day ACH, and that interim rulemaking about the change could take place as early as fall of 2014.

“ACH Network participants have always been supportive of the concept of same-day settlement, but all parties must fully prepare as businesses for implementation,” Estep said. “The study and phased approach provide the foundation needed to fully embrace and execute same-day ACH. The Network has always served as a foundation upon which we can build and innovate to meet the growing needs of today’s users and those of tomorrow. The time is right to move the industry forward.”